BUSINESS US fruit imports are among the latest products to lose their edge to domestic competitors amid trade spat

BUSINESS

US fruit imports are among the latest products to lose their edge to domestic competitors amid trade spat

Global Times

03:58, June 04, 2019

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Customers shop for Chilean cherries at a supermarket in Guangzhou, capital of South China's Guangdong Province on December 31, 2018. (Photo: IC)


Overseas cherry exporters to China didn't worry too much about competition from domestic cherry growers in the past, as Chinese cherries were often considered inferior to foreign cherries in taste and packaging.

But now that trend is reversing as China's homegrown cherries have been scooped up by Chinese customers, while some overseas cherries, particularly those from the US, are losing their market in China. 

Currently, some early-season cherries grown in California can be found for sale in the Chinese market. But in the observations of one industry insider, those cherries have been selling poorly in China. 

"Price is just one thing. What's more important is that their quality can't stand out," said Liu Wenpo, a cherry wholesaler dubbed the "cherry king" at Beijing Xinfadi agricultural products wholesale market. 

The majority of China's imported cherries come from Australia, the US and Chile. But China also imports a limited number of cherries from New Zealand, Uzbekistan, Canada and Argentina, Liu said.

US imports under pressure 

In June 2018, China announced it would raise the import tariffs by 25 percent on a number of US goods, including a list of US agricultural and aquatic products, in response to US tariff increases on Chinese goods. With the 25-percent tariff increase and a 15-percent tariff increase imposed earlier in April by the Chinese government, some US food will face an extra 40-percent tariff increase. 

For example, the import tariffs on US cherries were raised to 50 percent from 10 percent, and the situation is the same for US apples. The import tariffs on US oranges were raised from 11 percent to 51 percent. 

The toll the tariff increases had taken on US cherry exports was already evident in 2018, with statistics showing that cherry export volumes from the US to China through July 2018 were a third lower year-on-year, according to a report by freshfruitportal.com in September 2018. 

Now, with the trade negotiations still proceeding, some US cherry industry insiders are worrying about their fruit's fate in the Chinese market this year.  

"It is too early to assess what the Chinese market will be like this season, but one thing for sure, the 50 percent duty will have an impact on the sales of northwest (US) cherries," a representative from Northwest Cherry Growers, a US-based cherry industry association, told the Global Times via e-mail. 

The cherry season for the northwestern US won't begin until the middle of June, the representative said. 

More than half of the $226 million in US fresh fruit exports to the Chinese mainland in 2017 came from cherries, according to a report by freshfruitportal.com in April 2018. 

Zhu Danpeng, a Guangzhou-based food industry analyst, said that Chinese customers today are more sensitive to food quality than food price. 

"That is, they might spend less frequently. But if they spend, they must spend on products with good quality," Zhu told the Global Times. 

Because of this, tariff increases won't have too much impact on food sales if the food is first-class in quality and is unique to the US. 

"But I don't think the US has such a type of fruit that is irreplaceable," he said. 

Try Shandong cherries 

As US cherries lose their appeal in China, the popularity of Chinese cherries is soaring. 

A Shanghai housewife surnamed Han told the Global Times that she recently - and for the first time - bought some Chinese cherries for her family. In the past, she only bought cherries imported from Chile or the US. 

She bought a type of cherry grown in Shandong with a yellowish-pink color that distinguishes it from the dark-red imported cherries she was familiar with. 

Han described the taste of the Shandong cherries as being "not as sweet as imported cherries, but much juicier."

"I kind of had the impression that Chinese cherries are sour in taste, but in fact they are quite tasty. Besides, they are much more cost effective than imported cherries," Han said.

Han added that the Shandong cherries she bought cost only about 70 yuan ($10.1) per kilogram. 

Currently, there are various types of Chinese homegrown cherries with a wide price range offered on the market. 

The Global Times visited a fruit shop in the suburban Minhang district in Shanghai on Sunday, and in the shop, there were three types of Chinese cherries on sale, all grown in Shandong, priced at 30 yuan, 70 yuan and 90 yuan per kilogram. 

On Alibaba's Tmall.com, there were also many shops selling domestic cherries, with one type of "super big" cherries grown in Dalian, Northeast China's Liaoning Province being sold for 138 yuan per kilogram. 

In comparison, on two online fruit stores on JD.com, Chilean cherries were selling for 168 yuan per kilogram, while US cherries were being sold for 139 yuan per kilogram. 

"I have certainly seen a growing trend of more Chinese customers inclined to buy Chinese homegrown cherries instead of imported ones," Liu said. 

"From last year to this year, cherry consumption has been very strong in China. It seems that domestic customers can't get enough cherries to eat," he said. 

Improving cultivation 

Liu's company sold about 340 million yuan worth of cherries in 2018, about half of which were Chinese cherries. In 2017, sales of cherries amounted to 87 million yuan at Liu's company, he told the Global Times on Sunday. 

He also sensed that customers' appetites were increasingly "tilting toward" domestic cherries. "Particularly in May, June and July, the peak sales season for domestic cherries, business was very hard for imported cherries," Liu said. 

According to Liu, usually from May to September, cherries imported from the US, Canada and Uzbekistan hit the Chinese market, while cherries imported from Chile are mostly sold in China from November to February. 

Liu said that the most important reason for the increasing popularity of domestic cherries is that the quality of domestic cherries is catching up fast with improved growing techniques. 

"Many Chinese cherry growers have been studying and improving their cultivation skills, such as watering less and using more scientific fertilizing methods, to adjust the taste of the fruit," Liu said, adding that this year, the taste of domestic cherries is "better than ever." 

In comparison, the transport cycle for imported cherries, which usually takes about one month, can impact the freshness of the cherries. 

Besides, the sales period for fresh Chinese cherries is becoming longer, extending from four months in the past to about half a year now due to the development of more cherry varieties. This is also affecting the popularity of overseas cherry sales, Liu said. 

He predicted that with domestic growing skills improving further and with more new cherry varieties debuting, the quantity of imported cherries might drop sizably in three to five years.


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